Motilal Oswal Financial Services Share price and Fundamental Analysis

Company History

Motilal Oswal Financial Services Ltd (MOFSL) is a non-banking financial company (NBFC), registered under the Reserve Bank of India Act, 1934. The Company offers a diversified range of financial products and services such as Institutional Equities, Asset Management Business, Housing Finance, Currency Broking, Private Equity, Private Wealth Management, Commodity Broking, Investment Banking, Loan Against Securities, Retail Broking and Distribution and Investment Activities. It has a diversified client base including retail customers (including High Net Worth Individuals), Mutual Funds, Foreign Institutional Investors (FIIs), Financial Institutions and Corporate Clients. The Company carries its lending business by running Loan against Shares book and retail mortgage backed lending under the name of 'Aspire Home Finance'.

Motilal Oswal Financial Services Ltd was incorporated on May 18, 2005 and received the certificate of commencement of business on June 3, 2005. The company was established to offer financial services and products.

In the year 2006, Motilal Oswal Securities Ltd became a subsidiary of the company upon acquisition of shares of MOSL from the promoters Motilal Oswal and Raamdeo Agrawal and some members of promoter group. Also, Motilal Oswal Commodities Broker Pvt Ltd became a subsidiary of the company upon acquisition of shares from promoter.

During the year, the company acquired Motilal Oswal Venture Capital Advisors Pvt Ltd and Motilal Oswal Investment Advisors Pvt Ltd from promoters Motilal Oswal and Raamdeo Agrawal and thus those companies became the subsidiaries of the company. Also, Motilal Oswal Securities Ltd acquired customer rights and other assets of Peninsular Capital Markets Limited, broking entity based in Kerala. During the year 2007-08, the company implemented a fully automated web-based back office application for mutual fund distribution, which can be accessed across the country. Also, Motilal Oswal Capital Markets Pvt. Ltd became the subsidiary of Motilal Oswal Securities Ltd and, in turn of the company.

During the year, the company made an Initial Public Offer (IPO) of 2,982,710 equity shares of Rs 5 each in the price band of Rs 725 - Rs 825 per share. The issue constituted 10.50% of the paid-up share capital of the company. The Shares were allotted on September 5, 2007 and got listed on Bombay Stock Exchange Ltd and National Stock Exchange of India Ltd on September 11, 2007.

During the year 2008-09, Antop Traders Pvt Ltd became the subsidiary of Motilal Oswal Securities Ltd and, in turn subsidiary of the company. Subsequent to the year-end, Motilal Oswal Insurance Brokers Pvt Ltd and Motilal Oswal Asset Management Company Ltd became the subsidiaries of the company.

During the year, the company and Passionate Investment Management Pvt Ltd received in-principle approval from the Securities Exchange Board of India (SEBI) for setting up a mutual fund business in India.

During the year 2009-10, the company, jointly with their subsidiary Motilal Oswal Securities Ltd, acquired an office building at Prabhadevi in Mumbai for a consideration of Rs 164.58 crore. Also, Motilal Oswal Asset Management Company became 100% subsidiary of Motilal Oswal Securities Ltd, which is a subsidiary of the company.

In 2010, Motilal Oswal Financial Services' DP assets crossed Rs 10000 crore mark. During the year, Motilal Oswal Asset Management Company launched its maiden mutual fund offering - India's first fundamentally enhanced ETF.

In 2011, Motilal Oswal Financial Services group crossed Rs 1000 crore net worth mark. The group's network crossed more than 1,500 business locations and customer base crossed 7 lakh. Motilal Oswal Asset Management became India's first asset management company to ring the opening bell at NASDAQ Stock Market on 30 March 2011. The opening bell ringing heralds MOSt Shares NASDAQ 100, India's first US Equities based ETF tracking the NASDAQ-100 Index, listing on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

In 2016, Motilal Oswal Investment Advisors Pvt Ltd tied up with IMAP Advisors - one of the Top 6 Global M&A specialists, as their exclusive India partner. During the year, Motilal Oswal Asset Management Company crossed over 1 billion USD in equity mutual fund and PMS assets making it the fastest growing asset management company in the country. During the year, Aspire Home Finance cumulatively disbursed over Rs 1000 crore of loans to over 10,000 families. Aspire Home Finance is a housing finance company promoted by Motilal Oswal Financial Services Limited (MOFSL) and it is active in affordable housing space.

On 3 October 2016, Motilal Oswal Asset Management India (MOAMC) announced that it would be expanding its footprints into international markets with the Motilal Oswal India Fund (MOIF). MOIF will give global institutional investors access to its Indian equity capabilities. The fund has received seed investments from offshore clients.

In 2017, Motilal Oswal Asset Management crossed the milestone of US $2.5 billion equity assets under management.

As of March 31, 2018, the Company had 18 subsidiaries (including step down subsidiaries).

During the financial year ended 31 March 2018, Motilal Oswal Securities' (MOSL) broking business registered highest-ever annual revenue and crossed the milestone of Rs 1000 crore.

During the year under review, the Board of Directors of the Company at its meeting held on November 04, 2017 had approved Scheme of Amalgamation of Motilal Oswal Securities Limited (Transferor Company/wholly owned subsidiary company) with Motilal Oswal Financial Services Limited (Transferee Company/the Company) and their respective shareholders. The Scheme was filed by the Company with the Hon'ble NCLT on November 29, 2017. Pursuant to Order dated December 22, 2017 passed by Hon'ble NCLT, the meeting of the Members of the Company was held on February 20, 2018, wherein the Scheme was approved by the Members. Further, the Members of the Company have provided their approval through Postal Ballot Process on February 19, 2018 for transferring the existing lending business of the Company to Motilal Oswal Capital Markets Limited (Erstwhile Motilal Oswal Capital Markets Private Limited) (MOCML), its wholly owned subsidiary, as a going concern via slump sale. Pursuant to Order dated July 30, 2018, the Hon'ble NCLT has approved the Scheme. Subsequently, the Board of the Company at its meeting held on August 21, 2018 has made the Scheme effective from the Said Date i.e. August 21, 2018. The Appointed Date for the Scheme is April 1, 2017.

Pursuant to Regulation 16(1)(c) of Listing Regulations, Motilal Oswal Asset Management Company Limited (MOAMC) has become material subsidiary of the Company for FY 2017-18. Accordingly, the Company has three Material subsidiaries namely Motilal Oswal Securities Limited (MOSL), Aspire Home Finance Corporation Limited (AHFCL) and MOAMC as on March 31, 2018.

As of March 31, 2019, the Company had 17 subsidiaries (including step down subsidiaries).

During FY 2019, the Company added 1.5 lakh clients taking the total retail client base to ~12 lakh. Wealth Management AUM attracted assets with closing AUM for FY2019 at Rs 17,464 crores. It changed the name from 'Aspire Home Finance' to 'Motilal Oswal Home Finance' with effect from 28th May, 2019. AMC AUM, which includes MFs, PMS and AIFs stood at Rs. 38,893 crores at the end of FY 2019. It executed marquee transactions like acquisition of Aurangabad Electricals by Mahindra CIE. Fund III was launched in FY 2018 which, after exhausting its green-shoe option, stands fully raised at ~Rs. 2,300 crores. In the private equity business, the 4th real estate fund was launched with the target size of Rs. 1,200 crore and has made 2nd close at Rs. 850 crore.

The Company had made an application for surrender of Certificate of Registration (CoR) with Reserve Bank of India (RBI) and transferred its lending business to Motilal Oswal Finvest Limited (erstwhile Motilal Oswal Capital Markets Limited) as a going concern via slump sale. The RBI vide its order dated March 14, 2019 approved the cancellation of CoR held by the Company. Further, subsequent to Scheme becoming effective, the Company is undertaking the broking business as its principal business activity.

During the year 2019, the Company and MOSL has acquired 6,03,44,826 and 5,17,24,141 equity shares of Re.1/- each respectively of its subsidiary, Aspire Home Finance Corporation Limited (AHFCL).

As of March 31, 2020, the Company had 19 subsidiaries (including step down subsidiaries). The Company incorporated wholly owned subsidiary namely Glide Tech Investment Advisory Private Limited (GTIAPL) at Mumbai on November 25, 2019 to provide registered investment advisory services through IT enabled platform. In FY 2020, the Company launched Index Funds in AMC. Wealth AUM stood at Rs. 15,624 crores as of March 2020. As of March, 2020, total quoted equity investments stood at Rs 1,220 crores. Unrealized gain on all investments was ~Rs 172 crores. It added 2.5 lakh clients taking the total Retail client base to ~14.5 lakh during FY 2020.

As of March 31, 2021, the Company had 20 subsidiaries (including step down subsidiaries). In FY 2021, the Company incorporated subsidiary namely, TM Investment Technologies Private Limited (TMITPL) at Mumbai on July 24, 2020 to provide registered investment advisory services through IT enabled platform.

During year 2020-21, the Company acquired 95,68,614 equity shares of face value of Rs. 10/- each of MOFL (Wholly Owned Subsidiary). Also, it acquired 30,00,000 equity shares of face value of Rs. 10/- each of Glide Tech Investment Advisory Private Limited (Wholly Owned Subsidiary). Company had made strategic allocation of capital to long term RoE enhancing opportunities like Motilal Oswal Home Finance Limited, and sponsor commitments to its mutual fund and private equity funds. As of March 2021, total quoted equity investments stood at Rs. 2,180 crores. It added around 6.2 lakh clients taking the total retail client base to ~19.7 lakh in FY 2021. Its financial product distribution AUM was Rs. 12,785 crores as of March 2021.

As of March 31, 2022, the Company had 17 subsidiaries (including step down subsidiaries).

To consolidate fund management business of the Group, demonstrating the Promoter Group's direct commitment etc., the Board of Directors of the Company on December 24, 2020 and Members of the Company on December 16, 2021, approved the Scheme of Arrangement between Passionate Investment Management Private Limited (PIMPL or the Transferor Company 1) and MOPE Investment Advisors Private Limited (MOPE or the Transferee Company 2 or the Demerged Company 1 or the Transferor Company 3) and Motilal Oswal Real Estate Investment Advisors Private Limited (MORE or the Transferor Company 2) and Motilal Oswal Real Estate Investment Advisors II Private Limited (MORE II or the Demerged Company 2 or the Transferor Company 4) and MO Alternate Investment Advisors Private Limited (erstwhile Motilal Oswal Fincap Private Limited) (MO Alternate or the Resulting Company) and Motilal Oswal Financial Services Limited (MOFSL or the Transferee Company 1 or the Holding Company of the Resulting Company or the Company) and their respective shareholders under Sections 230-232 of the Act. The Hon'ble NCLT vide its Order dated March 11, 2022 has approved the Scheme of Arrangement between Group Entities. Further, the Scheme was made effective from March 30, 2022, being the appointed date April 1, 2020.

Further, pursuant to Corporate Restructuring of Group Entities under Scheme of Arrangement, the Company has allotted 8,82,42,508 Equity Shares to the shareholders of Transferor Companies i.e. Passionate Investment Management Private Limited (PIMPL), MOPE Investment Advisors Private Limited (MOPE) and Motilal Oswal Real Estate Investment Advisors II Private Limited (MORE II) as per the treatment provided in the Scheme. This includes cancellation of 8,63,74,063 Equity Shares held by PIMPL against issue of equal number of new Equity Shares of the Company to the shareholders of PIMPL and issue of 18,68,445 new Equity Shares of the Company to the shareholders of MOPE & MORE II.

During year 2022, Company launched IBEF IV, the biggest PE fund, with a target size of Rs. 4,500 crore. Total 13 deals were executed in FY'22. It completed IPOs of Aditya Birla Sun Life AMC, Devyani International, GR Infraprojects and Metro Brands. Around 8.8 lakh new client were added taking the total client base to ~28.5 lakh. It completed QIPs of Restaurant Brands Asia, Union Bank of India, Mold-Tek Packaging and Gulshan Polyols. It added 4.8 lakh SIPs in FY 2022. It completed first Direct Assignment transaction. It joined hands with U.S. International Development Finance Corporation (DFC), world's largest development finance institution for USD 50 million as a long term loan (for 15 years @ fixed ROI) under ECB route. It had 28.5 Lakhs retail broking and distribution clients growing at a CAGR of 28%. The Company had made strategic allocation of capital to long term RoE enhancing opportunities like Motilal Oswal Home Finance Limited, and sponsor commitments to its mutual fund and private equity funds. As of March 2022, the total quoted equity investments of the Company stood at Rs. 2,676 Crores. Its financial product distribution AUM was Rs 16,764 crores as of March 2022. It joined tie-ups with HDFC Life, ICICI Pru Life and Bajaj Life for life insurance products and Aditya Birla Health, Care Health and Star Health and Allied for health insurance products.

During the year 2022-23, the Company acquired entire Share Capital i.e. 50,000 Equity Shares having face value of Rs 10/- each of MO Alternative IFSC Private Limited. Accordingly, MO Alternative became the Wholly-owned Subsidiary of the Company. The Company set up a Representative Office in Dubai, United Arab Emirates.

During the year 2023, the Company launched 'Options Store'- industry first exclusive product to enable retail investors to take advantage of options trading later on launched Pro mode for advance traders; introduced 'Research 360' - a one stop shop to get end to end market research for all investors and traders; launched 7 passive funds, - 3 index funds, 3 ETFs and 1 FoF. in FY2023; on Alternate side, it launched 4 AIFs and introduced around 2.6 lakh SIPs in FY2023.